EXHIBIT 99.1
[INTEGRITY MEDIA LOGO]
For Immediate Release
INTEGRITY MEDIA REPORTS
HIGHER FIRST QUARTER SALES AND EARNINGS
DILUTED EARNINGS PER SHARE INCREASE 50% FROM PRIOR-YEAR LEVEL
MOBILE, Alabama (May 5, 2003) - Integrity Media, Inc. (NASDAQ/NMS: ITGR), a
media/communications company that produces, publishes and distributes Christian
music, books and related products, today reported its operating results for the
first quarter of 2003.
Net sales for the three months ended March 31, 2003 increased 20.6% to $18.6
million, compared with $15.4 million in the first quarter of 2002. Net income
increased 49.6% to $516,000, or $0.09 per diluted share, in the most recent
quarter, versus net income of $345,000, or $0.06 per diluted share, in the
corresponding period of the previous year.
"Net cash provided by the Company's operating activities increased by 226% to
$2.2 million during the first quarter, compared with $662,000 in the prior-year
period," noted Don Ellington, Chief Financial Officer of Integrity Media, Inc.
"Outstanding debt totaled $10.2 million, while cash and cash equivalents
approximated $5.2 million, at March 31, 2003."
"Despite continued weakness in consumer spending and an economic environment
characterized by uncertainty, we reported a 50% increase in first quarter
earnings per share, a performance that was in line with management's
expectations," commented P. Michael Coleman, President and Chief Executive
Officer of Integrity Media, Inc. "We are pleased with our first quarter results,
particularly in light of continued challenges within the recorded music industry
and the overall weakness in the economy."
"On March 31, 2003, we acquired Sarepta Music Pty Ltd, a leading Christian music
distributor and record label in South Africa. While our first quarter results
did not include any sales from Sarepta, the acquisition expands the scope of our
international operations in a vibrant and growing market for Christian music."
"We continue to be concerned about weakness in Christian bookstore (CBA) retail
sales going into the second quarter, along with the overall health of the global
economy," continued Coleman. "However, we are excited about upcoming releases by
Integrity Music, Integrity Publishers and M2 Communications, and at the present
time we remain comfortable with our previous guidance that diluted earnings per
share should rise more than 15% to a range of $0.43 to $0.48 for the year ending
December 31, 2003 (vs. $0.37 in 2002)."
Integrity Media, Inc. is a media/communications company that produces, publishes
and distributes Christian music, books and related products. It is a producer
and publisher of products that facilitate a Christian lifestyle. Integrity's
products are sold primarily through retail stores and direct to consumers
throughout the United States and in 167 other countries. The Company is
headquartered in Mobile, Alabama, and its common stock is listed on The Nasdaq
National Market under the symbol "ITGR". Information about Integrity, including
financial and operating performance, is also available at the company's Web
site, www.integritymedia.com/invest/financialpr.html.
THE COMPANY WILL HOST A CONFERENCE CALL TO DISCUSS FIRST QUARTER RESULTS AND
OTHER SUBJECTS AT 11:30 A.M. EST TODAY. SHAREHOLDERS AND OTHER INTERESTED
PARTIES MAY PARTICIPATE IN THE CONFERENCE CALL BY DIALING 800-360-9865 OR FOR
INTERNATIONAL/LOCAL PARTICIPANTS BY DIALING 973-694-6836, A FEW MINUTES BEFORE
11:30 A.M. EST. THE CALL WILL ALSO BE BROADCAST LIVE ON THE INTERNET AT
HTTP://WWW.FIRSTCALLEVENTS.COM/SERVICE/AJWZ379587410GF12.HTML. A REPLAY OF THE
CONFERENCE CALL WILL BE AVAILABLE TWO HOURS AFTER THE COMPLETION OF THE
CONFERENCE CALL FROM MAY 5, 2003 UNTIL MAY 12, 2003 BY DIALING 800-428-6051 FOR
PARTICIPANTS IN THE US/CANADA OR FOR INTERNATIONAL/LOCAL PARTICIPANTS, CALL
973-709-2089 AND ENTERING THE CONFERENCE ID290346. THE CALL WILL ALSO BE
ARCHIVED FOR 90 DAYS AT HTTP://WWW.FIRSTCALLEVENTS.COM/SERVICE/
AJWZ379587410GF12.HTML.
Some of the statements contained in this press release, particularly those
anticipating future financial performance, business prospects, growth and
operating strategies, new products and similar matters, are forward-looking
statements that involve a number of risks and uncertainties. For those
statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995. In addition to the factors discussed above, among the other factors
that could cause actual results to differ materially are: potentially changing
consumer tastes and demands with respect to Christian music and books generally
and praise and worship music, adult contemporary and pop/rock Christian music in
particular; the effect on profit margins of a continued increase in the
percentage of sales from retail sales; increases in the estimated cost of
television advertising, including production costs and the cost of air time, all
of which could materially affect the financial impact of the Songs4Worship
series and God Will Make A Way Lifesystems and other television advertising
initiatives; the success of the God Will Make A Way Lifesystems infomercial
could fall below expectations; the public's interest in the Songs4Worship
products could decline which could lead to revenues from the sale of these
products falling significantly short of the Company's expectations; sales of the
M2 Communications products could fall below expectations; the public's interest
in the new Integrity iWorship products could fall below expectations; sales of
Integrity Publishers products could fall below expectations; construction delays
or overruns at the corporate campus; and the risks identified from time to time
in Integrity's SEC reports, including, but not limited to, the report on Form
10-K for the year ended December 31, 2002. Any forward-looking statements
represent our estimates only as of the date of this release and should not be
relied upon as representing our estimates as of any subsequent date. While we
may elect to update forward-looking statements at some point in the future, we
specifically disclaim any obligation to do so, even if our estimates change.
For additional
information, please contact:
Don Ellington, CFO of Integrity Media, Inc. at (251) 633-9000
or
RJ FALKNER & COMPANY, INVESTOR RELATIONS COUNSEL AT
(800) 377-9893 OR VIA E-MAIL AT INFO@RJFALKNER.COM.
(FINANCIAL HIGHLIGHTS FOLLOW)
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INTEGRITY MEDIA, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA)
Three Months Ended March 31
---------------------------------
2003 2002
--------- ---------
Net sales $ 18,560 $ 15,396
Cost of sales 9,619 8,177
--------- ---------
Gross profit 8,941 7,219
Marketing and fulfillment expenses 3,218 2,744
General and administrative expenses 4,695 3,746
--------- ---------
Income from operations 1,028 729
Other expenses
Interest expense, net 102 43
Other expenses 21 54
--------- ---------
Income before minority interest and taxes 905 632
Provision for income taxes 329 212
Minority interest, less applicable taxes 60 75
--------- ---------
Net income $ 516 $ 345
========= =========
Adjustments to determine comprehensive income
Foreign currency translation adjustments 110 67
--------- ---------
Comprehensive income $ 626 $ 412
========= =========
Net income per share - Basic $ 0.09 $ 0.06
========= =========
Net income per share - Diluted $ 0.09 $ 0.06
========= =========
Weighted average number of shares outstanding
Basic 5,599 5,585
Diluted 5,954 6,006
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INTEGRITY MEDIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
Mar 31, 2003 Dec 31, 2002
------------ -------------
(Unaudited)
ASSETS
Current Assets
Cash $ 5,181 $ 4,821
Trade receivables, less allowance for returns and doubtful accounts
of $2,287 and $2,415 6,961 6,842
Other receivables 233 67
Inventories 5,527 5,191
Other current assets 4,416 4,558
-------- --------
Total current assets 22,318 21,479
Property and equipment, net of accumulated depreciation of $6,248 and $6,055
8,703 7,337
Product masters, net of accumulated amortization of $20,200 and $19,387
3,880 3,806
Other assets 8,140 8,237
-------- --------
Total assets $ 43,041 $ 40,859
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt $ 2,690 $ 2,690
Line of Credit 500 0
Accounts payable and accrued expenses 4,319 5,298
Royalties payable 6,443 6,256
Other current liabilities 2,462 997
-------- --------
Total current liabilities 16,414 15,241
Long-term debt 6,988 6,780
Other long-term liabilities 268 179
-------- --------
Total liabilities 23,670 22,200
-------- --------
Commitments and contingencies
Minority interest 665 606
-------- --------
Stockholders' Equity
Preferred stock, $.01 par value; 500,000 shares authorized, none
issued and outstanding 0 0
Class A common stock, $.01 par value; 7,500,000 shares authorized;
2,364,783 shares issued and outstanding 24 24
Class B common stock, $.01 par value, 10,500,000 shares
authorized; 3,385,000 shares issued and outstanding 34 34
Additional paid-in capital 12,956 12,956
Unearned compensation (452) (479)
Retained earnings 5,968 5,452
Equity adjustments from foreign translation 176 66
-------- --------
Total stockholders' equity 18,706 18,053
-------- --------
Total liabilities and stockholders' equity $ 43,041 $ 40,859
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